DoLE bans employers from profiting from wage deduction schemes

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THE LABOR department has banned employers deducting wages from workers for payment plans from profiting as a result of their participation in the scheme.

The Department of Labor and Employment (DoLE) made the changes in Department Order (DO) 195, “Rules Amending Section 10 of Rule VIII of the Implementing Rules and regulations of the Labor Code on Wage Reduction” which was signed by labor secretary Silvestre H. Bello on July 27.

Section 10(b) was amended as follows: “When the deductions are with written authorization of the employees for payment to the employer or a third person and the employer agrees to do so… the latter (must) not receive any pecuniary benefit directly or indirectly, from the transaction.”

The amendment is consistent with Article 113(c) of the Labor Code of the Philippines which states that employers can deduct from wages “In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.”

Article 113 also prohibits deductions from wages except “in cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance” and “For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned.”

DO 195 added that the issuance should not be used as a reason to cause “diminution or substitution of any benefits and privileges” of the employee. — Gillian M. Cortez